The Chartered Institute of Personnel and Development (CIPD) has reported that companies are now suffering from labour shortages due to a slowdown of migrants coming to the UK after the Brexit vote.
Their research, reported by the BBC, said that 1000 employers had stated that vacancies were now harder to fill and as a result they were having to increase wages to attract staff.
According to the latest official data, the number of non-UK-born workers in the UK decreased by 58,000 between April to June last year and the same period this year, with 40,000 of these non-EU-born workers. (This is an interesting statistic as ONS figures in August showed net migration at 270k for the year with 90k being EU citizens – so what are they doing?)
The CIPD went on to claim that these shortages would get worse after Brexit, with a system in place that treats EU and non EU citizens alike – a third of those companies surveyed who currently use non EU workers said that the administrative burden required was already too great.
So, is this going to be a major problem for employer and employee alike? I would suggest it is, in fact, an opportunity.
During the Referendum, the Leave side consistently stated that open door migration had seen a negative effect on wages at the unskilled end of the jobs market, a claim that Remain dismissed as pandering to racism.
Yet this research shows that employers are having to increase wages to attract staff now that the oversupply is starting to end – a vindication of the Leave position and the research of groups such as Migration Watch.
Wages are now outstripping inflation for the first time in many years, putting more cash in consumers’ pockets that they can then spend in the local economy, creating a ‘virtuous circle’ that feeds in to further economic growth and therefore more jobs.
If more of those employees are UK citizens, there is also less of the money earned being sent abroad and therefore retained in the UK economy (Many EU migrant workers stay for a few years and save for when they go home, spending little here and also sending a proportion of their wages back to their own country).
Whilst employment is currently at record highs, there are still nearly two million people unemployed (ONS states 4.1% of the population) and also many in part time or zero hours employment – they now have the opportunity to go for jobs that previously did not pay enough to support them and their families.
This will take people out of the benefits system, freeing up more finances for The Exchequer which can be spent in other areas such as infrastructure, schools and the NHS.
So, will this cause massive problems for the employers? Higher wages mean that profits may be affected and the CIPD suggests that it will increase workloads on existing staff and could lead to lost orders. I would argue that this is not necessarily the case – if people have more cash in their pocket then small increases in pricing of products will be offset and ethical businesses should have no problem continuing as normal.
Those paying artificially low wages to prop up a poor business model will be affected but in a free marketplace, others will fill the gap where there is demand as those companies fall by the wayside.
Where there is work to be done is in the points based system – if a third of companies say it is too difficult then the administration should be looked at to enable streamlined recruiting in genuine cases. This should not be too difficult once we are removed from the two tier system currently operated due to EU regulations – it should also not be used as an easy way to recruit on the cheap when there are people here who could be trained to fill those positions.
Brexit gives us the opportunity to become a self governing country once more. Proper border controls and a sensible, ethical, points based migration system gives us the opportunity to have the best of both worlds once again – properly paid jobs for our own citizens of all backgrounds and abilities whilst enabling our businesses to attract those we need from abroad in sensible numbers to grow our economy.
It is an opportunity we need to grasp with both hands as we re-engage with the rest of the world as an outward looking, globally trading and independent country once more.
(Articles reflect the views of the author, and not necessarily those of Luke Nash-Jones, The Red Pill Factory, or Make Britain Great Again.)